President Obama to reject Keystone XL pipeline, says it 'would not serve national interests' of U.S.

President Barack Obama says he's rejecting the Keystone XL pipeline because he does not believe it serves the national interest.

President Obama pulled the plug Friday on the Keystone XL pipeline.

He said it doesn't make sense to build a behemoth that would allow oil from Canada to flow across the U.S. and down to the Gulf of Mexico.

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"The State Department has decided the Keystone XL pipeline would not serve the national interests of the United States," Obama said. "I agree with that decision."

President Barack Obama, flanked by Secretary of State John Kerry (r.) and Vice President Joe Biden, said that he will block the construction of the controversial Keystone XL oil pipeline. (MANDEL NGAN/AFP/Getty Images)

Obama also said the project had taken on an "overinflated role" in U.S. political discourse and had been used as a "campaign cudgel" by supporters and opponents alike.

"The critical factor in my determination was this: Moving forward with this project would significantly undermine our ability to continue leading the world in combating climate change," Secretary of State Kerry added in a statement.

The Obama Admin's politically motivated rejection of the Keystone XL Pipeline is a self-inflicted attack on the U.S. economy and jobs.

Immediately the GOP presidential hopefuls weighed in with condemnation.

"The Obama admin's politically motivated rejection of the Keystone XL pipeline is a self-inflicted attack on the U.S. economy and jobs," former Florida Gov. Jeb Bush, now a floundering Republican presidential candidate, said on Twitter.

Obama said that the Keystone XL pipeline does not serve national interest, and has played too big of a role in politics already. (STRINGER/REUTERS)

Florida Sen. Marco Rubio vowed to approve the pipeline if he wins the White House in 2016.

Oil producers and the few construction unions that backed the project also slammed Obama's move.

"It's ironic that the administration would strike a deal to allow Iranian crude onto the global market while refusing to give our closest ally, Canada, access to U.S. refineries," said API trade association boss Jack Gerard.

"This decision will cost thousands of jobs and is an assault to American workers. It's politics at its worst."

Newly elected Canadian Prime Minister Justin Trudeau, a Keystone supporter, said he was disappointed but added that Canada's relationship with the U.S. "is much bigger than any one project."

In turning thumbs down on the project, Obama handed environmentalists a huge victory and ended seven years of suspense about what he might do about the contentious issue.